Having gone through their fourth wave of the virus, many Hong Kong (HK) businesses suffered as the country enforced stricter social distancing measures. CPA Australia’s 2020-21 Asia-Pacific Small Business Survey also showed that the country’s businesses’ confidence has also reached a record low as only 16 percent of businesses reported growth, and only 21 percent expect growth in 2021. As such, we wonder how Hong Kong businesses are surviving and thriving amidst the current time today? What are some current survival strategies these businesses are undertaking?
In previous articles, we covered topics like doing business in Hong Kong and gave a glimpse of the Hong Kong startup ecosystem. In the process, we discussed topics like the many benefits of this country to easily start and connect your business to the rest of the world.
Hong Kong’s Business Economy in 2021
Having said that, we never covered the COVID-19 impact on Hong Kong’s SMEs and the economy as a whole. While it’s clear that the pandemic has disrupted many economies, it’s also interesting to see that it also has presented businesses with unique opportunities to make meaningful changes in how to survive and continue to operate their business. According to a research conducted by McKinsey, compared to the previous recession in 2009, more than 1,500 small businesses in 2021 successfully navigated the business disruption to create value.
However, surviving the disruption is easier said than done. There are three things that have become increasingly essential in navigating the crisis. They are to pick up more digital skills for the workplace, learn to be organizationally agile, and cooperate better. Governments play a pivotal role in reviving economies, such as supporting their economies with billions of dollars and relaxing rules to ease the burden on businesses. The Hong Kong government, for instance, plans to spend more than 120 billion Hong Kong dollars ($15.5 billion) on measures to support its economy, which has been in recession for two years.
Interview with AsiaBC
To delve deeper into the topic, Greenhouse had the opportunity to interview Vivi Lim, Vice President of Business Development at Asia Business Centre on how their business coped with the crisis.
What does the business condition in Hong Kong look like in a Pandemic situation? How Hong Kong reacted and supported firms to adapt to the situation?
Today, office workers are back to business and restaurants have reopened again for dining. For most industries, the pandemic has brought a variety of setbacks and challenges in the city – many operations and businesses were put to a halt to follow the worldwide health protocol. These made a huge impact on our economy, and as a response, the Government adjusted its budget for the year to stabilize Hong Kong’s economy, including business registration fee waivers, reduction of profits taxes, and raising a low-interest loan. This course of action will help not only the businesses located in Hong Kong but the city as well, and keep Hong Kong as one of the most attractive startup gateways with super low profits tax rates across the globe.
“… the government adjusted its budget for the year to stabilize Hong Kong’s economy, including business registration fee waivers, reduction of profits taxes, and raising a low-interest loan.”
How did AsiaBC maintain business continuity by going digital?
We are a solution-based consulting firm in Hong Kong that provides customized startup and corporate services. We work well with other bankers and professionals in Hong Kong, China, Asia, and other parts of the world. Currently, we are working with over 30 banks worldwide, with over 600 overseas partners. Our service scope covers some very sophisticated solutions like MSO (Money Service Operators) license application in Hong Kong, Labuan company with Crypto License, an offshore business establishment with a traditional bank account, etc.
We try to create a response strategy based on our principles and values; it is a great opportunity to clarify, promote and live our business ethics. We believe what makes us different is that we try to understand the needs of clients from overseas, and we focus on tailor-made corporate supporting solutions. As for the COVID situation, we promote things differently – we try to help customers by increasing the effectiveness/chances of opening an account remotely (close to 100% success rate). We are also working with the top 6 fintech account service providers in Hong Kong to provide alternative banking solutions for our clients during the COVID-19 pandemic, which helps to facilitate the entire business kick start process.
“We believe what makes us different is that we try to understand the needs of clients from overseas; we focus on tailor-made corporate supporting solutions.”
New cloud accounting tools like Xero are also being used to assist our clients in handling their business finances more time- and cost-efficiently compared with the past. To further promote Xero, AsiaBC has been organizing webinars with WeWork for our entrepreneur community to join and get to know this pragmatic digital cloud platform in a handier way.
How did you engage with your team? Engaging with external stakeholders & clients?
When engaging with the team, we listen and consider their inputs. Every person on the team has valuable insights to share, and we must listen to them. For external stakeholders, we always try to gather the right team that will be the representation on business areas to make a comprehensive approach.
As for clients, we believe that every business is unique, and so a similar approach is not enough to support our customers’ growth and expansion. We are more than happy to share our experience and knowledge with the entrepreneurs in our community and eager to be their long-term partners in Hong Kong.
What are the learning points from your team, founder, clients, etc?
First, we have to be open-minded and be adaptable to change. It will allow us to be flexible and move swiftly in changing times.
Next, you have to learn and equip yourself with new ideas. From time to time, we communicate with our local partners all over the world to equip ourselves with the most updated information and knowledge, as we believe the Incorporation section contains a broad aspect. Asking and respecting the insights of others when making business decisions also makes us learn quickly.
Lastly, we must understand that technology is essential even for a traditional industry like us. Although the company secretarial industry is conventional, we still believe that we must invest in technology to ensure that we are not using an out-of-date system. For example, we have a high-powered CRM system that can manage and follow up clients’ data effectively, supported by a resourceful KYC tool. We also equip ourselves with AI chatbots that can identify client needs, understand and respond to client queries quickly.
- KYC = Know Your Customer
- CRM = Customer Relationship Management
- MSO = Money Service Operations
About Asia Business Centre
Asia Business Centre (AsiaBC) is a professional corporate services provider in Hong Kong that supports small and medium-sized enterprises (SMEs) and investors to do business in this country.
AsiaBC provides many services to ensure that they streamline the needs of their clients from overseas and offer tailor-made corporate supporting solutions. These services include:
- Combining company formation, bank account opening, and compliance maintenance,
- Accounting and taxation,
- License application and other sophisticated support with local expertise linkage,
- Obtaining business centre solutions, and more.
AsiaBC will also be opening its new office located on the 8th Floor, China Hong Kong Tower, 8-12 Hennessy Road, Wan Chai, Hong Kong, effective from 7 June 2021.
Hong Kong Government Aid
Despite the many challenges, the Hong Kong government has been pushing out different schemes to help, especially SMEs. With over 340,000 SMEs in HK, the government recognizes the importance of these businesses for the development of the country.
As measures are tightened further, HK businesses are also advised to work from home to curb the situation. We also continue to see the trend of SMEs turning to eCommerce, where online stores and websites start to boom.
Hong Kong economic forecast 2021
According to the First Quarter Economic Report 2021 released by the HK government, the Government Economist, Mr. Andrew Au stated that HK’s economy recovered visibly in Q1 of 2021. He states that the country has a predicted forecasted real GDP growth of 3.5% to 5.5% in 2021.
Stephen Weatherseed, Managing Director of Mazars Hong Kong, also displayed his confidence about the country to the Financial Times; that they will be able to rebound quickly just like they did post-Sars in 2003. As such, we hope that with strong government support and the tenacity of her citizens, they will be able to tide through this difficult time.
If you have any questions regarding the content of this article, contact us here and we will gladly answer them. We strongly recommend connecting with pre-qualified service providers on the ground to ensure you receive the most updated information when starting your business.